Warren, a Democrat, has long been known as a stanch defender of consumers and a lone voice in the wilderness for an independent agency to write rules for mortgages and credit-card products.

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Elizabeth Warren

However, analysts and other observers argue that Warren, who is reportedly expected to win a seat on the banking panel, will focus on issues beyond the Consumer Financial Protection Bureau, an agency she helped establish.

They say she will also concentrate her energy on oversight of the implementation of the Dodd-Frank Act, written in response to the financial crisis. Beyond the consumer protection bureau, Warren will try to ensure that legislation seeking to repeal sections of the statute fail and that regulators establish tough bank rules based on the law.

Specifically, she is expected to get up to speed quickly on the so-called Volcker rule, which seeks to prohibit big banks from trading stocks and derivatives with their own money and significantly limit banks’ investments in hedge funds and private-equity funds. Bank regulators have drafted a 300-page proposal based on the statute, but have not yet finalized the controversial regulation. Read about report saying Warren getting a seat on Senate banking panel

“Issues like the Volcker Rule are intimidating to some lawmakers who have less experience with banks, banking and financial transactions,” said former Goldman Sachs
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banker Wallace Turbeville. “But not her. She will be able to get up to speed on issues like the Volcker Rule quickly and take an interest.”

She is also expecting to be an investor advocate and focus on the Securities and Exchange Commission, analysts said.

Dean Baker, co-director of the Center for Economic and Policy Research in Washington, said he expects Warren will be very interested in the Securities and Exchange Commission as well as who President Barack Obama plans to nominate to replace the agency’s outgoing chairman, Mary Schapiro.

“Warren will be an investor advocate and she will seek to make sure the SEC chairman is monitoring money-market funds and making sure corporations are following the rules that are on the books,’ Baker said.

Donald Lamson, a former Office of the Comptroller of the Currency assistant director who now is counsel at Shearman & Sterling, said that he believes Warren would urge the SEC to take very pro-small investor positions.

“Warren would have an interest in who gets that spot,” he said.

Baker added that he expects Warren to fight back against efforts by some lawmakers to weaken a measure in the Dodd-Frank Act dubbed the Lincoln provision after ex-Sen. Blanche Lincoln. The measure requires big banks to move certain derivatives business to separately capitalized divisions. Read about Warren reaching out to bankers

“She will likely support a provision that would separate some derivatives from commercial banks,” Baker said.

Any influence as a freshman senator?

However, Bert Ely, president of Ely & Co. in Alexandria, Va., said that as a freshman senator, Warren will not have as much influence as many suspect. He added that if there is legislation that comes out of the panel, she is unlikely going to be included on the critical conference committee that reconciles differences between House and Senate versions of legislation.

“She will be well down the pecking order, well down the dais and last to ask questions,” Ely said.

Regulatory observers differ on whether Warren will be permitted to chair a coveted subcommittee on the banking panel. Some say she doesn’t have enough seniority while others say her expertise may be enough to get such a position.

Warren, an expert on bankruptcy at Harvard University, defeated Sen. Scott Brown for the seat in a hotly contested election last month.

Turbeville noted that part of Warren’s experience stems from a previous position she held — chair of a congressional inquiry into the bank bailout.

“The fact that she is so well informed on the issues is important,” he said.

Warren, born and raised in Oklahoma, has studied and written about consumers and debt for years, and saw trouble coming, before the economic meltdown hit.

Despite helping set up the consumer bureau, Republicans waged a successful effort to ensure Warren did not chair it. As expected, Warren is also expected to be a key defender of the consumer protection bureau.

The bureau, which is very controversial with Republicans, was given broad powers to write rules for mortgage and other credit products.She will likely seek to fight back efforts by Republicans to change the CFPB into a bipartisan commission made up of five members, instead of having one person in charge, as currently stipulated by law.

“With her on the banking committee and Democrats controlling the Senate, it will be hard to imagine that legislative change happening,” Baker said.

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